Clearpool Expands to Avalanche with Exclusive Launch of Credit Vaults

Apr 1, 2024 / By Avalanche / 4 Minute Read

Clearpool’s Credit Vaults aim to increase RWA accessibility on Avalanche with loan efficiency for lenders and borrowers.

Clearpool, a leading on-chain credit marketplace connecting institutional borrowers with a worldwide network of lenders, is launching Credit Vaults on Avalanche. Designed to enhance lending efficiency by utilizing real-world assets (RWAs) like private credit, Credit Vaults will offer uncollateralized borrowing for institutions and exclusively host Clearpool's first RWA pool on Avalanche. Clearpool's launch of Credit Vaults on Avalanche aligns with a shared focus on bringing tokenized assets and greater utility into the Avalanche ecosystem.

The initial Credit Vault, launched by Banxa, a publicly listed (TSX.V: BNXA, OTCQX: BNXAF) global infrastructure provider enabling embedded crypto in the payments space, is designed to meet the requirements of both borrowers and lenders within a blockchain environment.

Credit Vaults are the latest chapter in the explosive growth of RWAs on Avalanche. In 2023, Avalanche Evergreen Subnets emerged, offering financial services firms a way to test tokenization and the merits of on-chain finance in a controlled environment. Onyx by J.P. Morgan leveraged an Evergreen Subnet to explore how tokenization could potentially help automate portfolio management. More recently, Citi and DTCC Digital Assets used the Avalanche Spruce network to test the benefits of private market tokenization with key asset managers Wellington Management and WisdomTree.

Clearpool tokenizes loans made to Banxa and transfers them on-chain. Lenders receive a cpToken in return, which represents their stake in the pool with interest automatically compounding. Banxa’s Credit Vault grants a seven-day repayment period and extra rewards in AVAX tokens.

"Launching Credit Vaults on Avalanche is a major milestone for Clearpool and the RWA sector as we truly pioneer migrating credit on-chain. Working with prominent players such as the listed fintech, Banxa, and experienced credit fund, Cauris, validates the enormous potential of Credit Vaults to revolutionize the RWA DeFi space and expedite institutional adoption," said Jakob Kronbichler, CEO & Co-founder of Clearpool.

“Avalanche is the ideal platform to support the launch of Clearpool’s Credit Vaults,” said Morgan Krupetsky, Director of BD Institutions and Capital Markets at Ava Labs. “The collaboration with Clearpool showcases a mutual commitment to developing innovative digital financial products, and we are excited to welcome new RWA use cases into the ecosystem.”

Clearpool's permissionless pools brought private credit yield to DeFi, especially for trading firms and market makers as borrowers. Credit Vaults cater to the influx of new on-chain borrowers, including fintech and payment companies, through stable rates and stickier liquidity. With Credit Vaults, Clearpool allows borrowers to set their own terms, such as interest rates and repayment frequencies. Credit Vaults also enable higher lending APYs via 100% utilization, increasing lending volume, and protocol revenue, making interest rates for lenders more efficient.

For more on Clearpool and borrowing into their Credit Vault, visit their website.

About Clearpool

Clearpool is the leading decentralized finance credit marketplace. A permissionless protocol enables institutions to raise unsecured liquidity directly from DeFi markets, while a separate fully permissioned platform, Clearpool Prime, further meets the compliance needs for wholesale borrowing and lending of digital assets by institutional market participants. Liquidity providers on Clearpool earn attractive yields, with pool interest rates enhanced by additional rewards paid in CPOOL — the protocol's utility and governance token. Clearpool LP tokens, called cpTokens, are the building blocks for a system of tokenized credit and on-chain risk management.

About Avalanche

Avalanche is a smart contracts platform that scales infinitely and regularly finalizes transactions in less than one second. Its novel consensus protocol, Subnet infrastructure, and HyperSDK toolkit enable Web3 developers to easily launch powerful, custom blockchain solutions. Build anything you want, any way you want, on the eco-friendly blockchain designed for Web3 devs.

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